Since the financial crisis in 2008, the economy around the world has been growing slowly, especially in developed countries. And stock markets in many counties experienced downturns. Fox example, the peak point is around 14,000 points for Dow Jones Industrial Average index in 2007, while it declined to 6,600 in 2009. Also the unemployment rate suffered badly, a larger number of youngsters cannot get a job and even some employee has to work less to share workload with other employee. In 2011, this global recession trigger European sovereign debt crisis, especially in Greece, Ireland, Portugal and Spain. In May 2011, one hundred thousand of people protest against the financial retrenchment in Athens. In UK Mervyn King, Bank of England governor, said this financial crisis might be the worst crisis that UK has ever meet. The financial crisis of 2007-2008 is considered to be the worst financial crisis since 1930s. The main reason, I think, is that the regulation of financial markets did not keep pace with the creation of the financial derivative instrument, which lead to cash from taxpayers is used to rescue the irresponsible operation of big banks. On the other hand, when the investment strategies are successful, these major banks get profit. Therefore, the public is becoming so call scapegoat who clean up the mess. In order to deal with this problem, "ring-fencing" approach was introduced and backed by Chancellor George Osborne. A body of ring-fencing means an organization in UK which performs several "core activities". Recently, the only "core activity" refers to the activity that accepts deposits. In fact, four provisions are included: (1) accepting deposits; (2) making payments; (3) withdrawing money; (4) over drafting. In this way, "ring-fencing" can be used to separate the excluded activities (risk activities) in the investment banking from the "core activity". In practise, the real objective is to handle with the problem of "too big to fall". In combination with the resolution method and those banks which has the higher capital measures, it can be resolving the problem of "too big to fall" economically and operationally. However, many famous economists, like Paul Volcker, the former chairman of the Federal Reserve and the architect of the "Volcker Rule" argue that if the ring fence approach is put into effect, banks in UK will not safeguard taxpayers in foul weather. They think that total separation is a better choice for bank regulation. In history, total separation approach refers to "Glass-Steagall Act", which is the first time to separate the commercial bank from investment bank. At that time, the investment bank stated to access the field of traditional banks, taking deposit. Under such circumstances, the profits of commercial banks were damaged significantly. Therefore, not only retail banks begin to invest their assets but also purchase new shares for reselling to the public. Greedy made baking industry tolerate huge risks in exchange of even larger return. Implementation of "Glass-Steagall Act" imposed the separation between retail banks and investment bank. From then on, the commercial banks are only allowed to do business with individuals and ordinary firm, and investment banks do riskier business, like mergers and acquisitions In order to promote the development of financial derivative instrument, the "Glass-Steagall Act" was repealed On November 12, 1999. Without the matched bank regulation, the rapid development of financial derivative instrument became the chief criminal of the financial crisis in 2007 again. In order to avoid the cash of taxpayer was used to clean up the mess again. The ring fence and the total separation approaches were presented by the UK government. While the ring fence approach was seemingly supported by the government. The Chancellor George Osborne announced that the major banks in UK will be totally separated if they cannot obey new rules to ring-fence risky investment business from retail business. Although the relative laws about the ring fence have been legislated, this will leave some problem inevitably: The accurate range of ring fence. This is what kinds of activities and assets can/cannot be included in the ring fencing body: there are still many different kinds of middle activities and assets that are not defined practically. The accurate content of exemption is unknown from ring- fence, for example the de minimis exemption. The specific prohibitive activities of the banks The definition of the derivative does not defined very specifically. Therefore, whether the ring-fence can be implemented or not is still a practical problem. Besides, compared to the total separation approach, the ring fencing method has many weak points. As the ICB acknowledged "full separation might provide the strongest firewall to protect retail banking services from contagion effects of external shocks". In means if the domino effect (financial contagion) happens, the ring fence model cannot provide enough protection to the financial system. Furthermore, whether the ring fence can solve the problem that the major banks are too large and too interrelated to fail or not are unknown, Supposed the ring fencing is implemented, there are still some banks that have assets beyond than UK annually GDP. In addition, there is not a necessary connection between capital levels and riskiness of a bank; we should not pay too much attention on stricter capital requirements. That is to say the taxpayers will still tolerate the huge risks of financial system. In the third place, the "cost impact" is still unclear. Although the estimation of cost for banking sector recommended by ICB is around £4bn and £7bn, the practical costs will be higher. Obviously, these costs would either transfer to the customers or be soaked up by the banks with lowering profits to shareholders. Therefore, it will cause that customers and shareholders change their minds to choose those banks with lower costs and higher return. In order to lower the costs, those banks may move their head quarters to other countries. On that day, the financial centre will become a bubble reputation for London. No matter what kind of approach we use, there is no doubt that the process of transferring a wholesale bank to a retail bank will be a milestone for bank regulation. In order to satisfy the requirement of ring-fence, we have to make a detailed analysis of the some accounting items, like assets and liabilities, which are inside or which are outside the ring fence part. All in all, there are still lots of blanks that need to be completed.